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Opinion

A global GDP of no more than 5%

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If 2021 was the year of recovery, after the production and economic slowdown caused by the massive confinements and quarantines a year earlier, with a world GDP that according to the OECD could have rebounded to 6.8%; by 2022 the scenario that the OECD, the International Monetary Fund (IMF) and the World Bank are all agreeing on is a world GDP of no more than 5%.
 
There are many pending issues for the economy to get back on track as it was before the pandemic: the supply chains of several raw materials not only necessary for the primary sector of production have not been fully restored, but there are also intermediate goods that are not arriving as quickly as usual, affecting key sectors such as the automotive industry. 
    
At the same time, the labour market has not fully recovered the pre-pandemic levels of employment and employment, the International Labour Organisation (ILO) estimates the destruction of jobs to be close to 125 million jobs lost. 

The ILO indicates that it is essential to stimulate the economy and employment through an active fiscal policy, a flexible monetary policy and the granting of loans and financial aid to specific sectors, including the health sector. The capacity and resilience of employers' and workers' organisations needs to be strengthened

Last year's bounce-back from the V-shaped rebound to a phase in which the economy will seek more stable growth, but will need to overcome the pandemic phase so that 2022 will be a year of lower GDP as estimated by the major international organisations.

Even China will not be spared from the slowdown; the Asian giant requires growth of over 8% to sustain its economic expansion. Within the global spectrum, only India is expected to achieve a GDP that could range between 7.5% estimated by the World Bank or 8.5% according to the IMF. For China, on the other hand, GDP is expected to be between 5.1% according to the OECD and 5.6%, according to the IMF. 

World GDP forecasts are along the same lines: 4.3% according to the World Bank, 4.5% according to OECD forecasts and 4.9% according to IMF analysts. 

The US performance has the most discordant forecasts, much depends on the immediate effect of the 1.2 trillion dollar stimulus and infrastructure plans and on the outcome of the legislative elections that will test the Democratic Party of President Joe Biden, who will complete his first year in office with a marked political, electoral and physical wear and tear. 

On the subject

The outlook for the US economy ranges from 3.7 % forecast by the OECD, 4.2 % by the World Bank to 5.2 % by the IMF. Particular attention will be paid to the Federal Reserve's interest rate movements

In the case of Europe, the Eurozone has more coinciding estimates of 4.3% according to the IMF and the OECD or 4.4% according to the World Bank. Spain has the best forecast at around 5.5% or even 6.4%, well above the estimates for Germany and France. While the UK could reach 5%, according to the IMF.

In Latin America, Mexico and Brazil are the most important economies for many foreign investors who look to the region for opportunities to buy companies affected by the pandemic. 

For Mexico, growth expectations start at 3% according to the World Bank or 3.3% according to the OECD, up to 4%, in IMF figures and ECLAC, which is a regional organisation, puts it at 3.2%, almost half of the GDP for 2021. The Aztec country will have elections for several governorships in six states: Aguascalientes, Durango, Hidalgo, Oaxaca, Quintana Roo and Tamaulipas. 

In Brazil, there will be presidential elections, as well as elections for legislative representatives, the instability and uncertainty added by the elections are a factor of pressure on economic estimates in addition to the blow of effect that the mismanagement of the health emergency has had and is having in the Carioca country. President Jair Bolsonaro is considering running for re-election while the leftist Lula da Silva, for the Workers' Party, has already expressed his intention to run. 

The electoral process will have a first round on 3 October and a second round on 30 October. GDP estimates are marginal: the OECD puts the figure at 1.4 %, the IMF at 1.5 % and the World Bank is more promising at 2.5 %.  ECLAC forecasts 2.2 per cent, also below the 5.2 per cent preliminary GDP in 2021.